Written Procedures – Don’t leave money on the table in your exit planning and succession planning!
If I recommend to a client that they document all of their procedures, I usually get a verbal, or nonverbal “Ugh!”, and get walked to the door.
If I say I have a recommendation that will help them:
- Grow Revenue
- Grow Profitability
- Build Value
- Improve Customer Retention
- Minimize Errors
- Grow their Customer Base
- Improve Employee Morale AND Retention
- Reduce Safety Incidents
- Minimize Potential Fines from Regulatory and Compliance Problems
…they ask me to take a seat and fill them in.
Of course, the recommendation is the same. Document how you do things, how every single business process happens. This is one of several critical drivers of business value, whether your succession plan / exit plan target is two years from now or ten years from now. Documentation of your processes is an incredible benefit in countless ways. I am NOT suggesting writing these procedures just so you can say you have them.
Approaching this the right way will provide a significant, immediate ROI and will enhance the value of your business over time as you approach a sale.
The right approach means engaging all of your staff. Profitable business process improvement means working together on written procedures and, along the way, focusing on improvements that can be made right away.
Your business valuation will increase. I have seen clients achieve significant bottom line improvements in operations and their customers’ experience by reviewing what they do and how they do it…then documenting the procedures. A client went paperless over night after a team discussion on the flow of paper through their critical business processes. A small team of eight people absorbed the loss of a team member without filling the position…by reviewing, improving and documenting their processes. The ROI can be stunning. Another client example.
When you can provide this thorough documentation to a potential buyer of your business, the price goes up.
That buyer has the roadmap and does not have to figure things out. Think about the franchise model. While there are many elements to consider in a potential purchase of a franchise, a significant plus is being handed the manual.
Envision a buyer considering whether to buy your company or a competitor. You are both close in revenue, profitability, competence of your staff and other attributes. But YOU have the manual of procedures that outlines every aspect of the business. Which company will that buyer choose?
I believe that most business owners know this, and that you know this, we just never get around to it…and therefore leave too much money on the table when it comes time to sell.
The Bottom Line on the Value of Written Procedures and Business Process Improvement
Having written procedures is a value driver for your business. Start now, build on your written procedures over time. Rushing when you are about to sell will not work.
Succession Planning / Exit Planning, Building Transferable Value for Sale
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